The EEOC has issued its long-awaited guidance on wellness programs and what is considered involuntary under the ADA. The EEOC is the administrative agency charged with enforcing the ADA. It issued a Notice of Proposed Rule Making (NPRM) of Proposed Rules on April 16 that provides guidance on the extent to which the ADA permits employers to offer incentives to employees who participate in wellness programs part of a group health plan. The Human Resource and Group Health Insurance Industries have been troubled by the EEOC’s approach to an employers’ use of incentives or penalties and what it considered “voluntary” participation in the context of wellness programs. In the Proposed Rule, the EEOC states: “[t]he Commission concludes that allowing certain incentives related to wellness programs, while limiting them to prevent economic coercion that could render provision of medical information involuntary, is the best way to effectuate the purposes of the wellness program provisions of [the ACA and ADA].”
The Proposed Rule provides definitions of what the EEOC considers voluntary under the ADA, still requiring that employees not be required to participate. The EEOC permits incentives or penalties that do not exceed thirty (30%) percent of the employee-only cost of the program. The Proposed Rule also requires specific notice requirements to employees and special rules regarding confidentiality.
A significant development is that tobacco incentives or penalties must be limited to 30% of employee-only health care coverage costs, rather than the 50% allowed by HIPAA and the ACA, if the tobacco-related wellness program involves disability-related inquiries or medical examinations. The EEOC specifically stated that asking an employee if they still use tobacco is not a disability-related inquiry while a biometric exam to test for tobacco use is. Many Employers and Plan Administrators already have programs that issue a 50% surcharge for tobacco users. How can the EEOC’s provision be reconciled with what HIPAA and the ACA already allow? How will the EEOC’s new limit on incentives for participation in wellness programs that ask disability-related inquiries or require medical examinations affect the ACA’s tobacco incentive?